National Security Adviser Stephen Hadley was on Late Edtion with Wolf Blitzer (off topic: When is CNN going to find someone else to host Late Edition so Wolf can have a life on weekends?). They discussed the violence in Iraq and the Port sale issues. Transcript follows…
WOLF BLITZER, HOST: Stephen Hadley, welcome back to LATE EDITION.
Thanks very much for joining us. There was a really powerful explosion at that Golden Mosque in Samarra in Iraq this past week, threatening all out civil war, if you will. Does the United States government know who was responsible for that attack?

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: We do not have the kind of forensic evidence at this point to know who is specifically responsible. I can tell you what the Iraqis have said. The Iraqis have basically said that the — the threat to the unity of Iraq is the terrorists and their terrorism activities. And they are clearly putting it on, those terrorist elements that have caused so much carnage in Iraq here in recent days.

BLITZER: Some Iraqis, including Mowaffak al-Rubaie, the national security adviser, have pinpointed Abu Musab al-Zarqawi and his group, al Qaeda in Iraq. Are you prepared to go that far?

HADLEY: I know that’s what they’ve said. Certainly, this kind of activity is very consistent with what Zarqawi and his people have done, but as I say, you know, there’s a process by which you go through forensic evidence to make these kinds of determinations. We have not been through that, but that is — the Iraqis are pretty clear on who they think is responsible for this, and it’s Zarqawi.

BLITZER: I interviewed Ayad Allawi, the former interim prime minister, earlier in the week. He said last summer he was already worried that the Iraqis were in a stage one civil war. He thinks they’ve now gone to stage two. And he says God help all Iraqis, all 27, 28 million and God help the entire region if they go to stage three.

What is your sense of the possibility of an all-out civil war between Shiite and Sunni and Kurds, perhaps, erupting right now?

HADLEY: Well, there obviously have been sectarian tensions in Iraq. This is — these go back historically for a long time. They were somewhat kept under wraps by Saddam Hussein. But obviously, there had been sectarian tensions. And of course, what Zarqawi has done is tried to exacerbate those by his consistent attacks on Shia sites.

This recent attack is very troubling. We strongly condemn it. It has caused real tension, but I thought it was interesting that the Iraqi prime minister yesterday came out and said, “We are not on the verge of civil war.” And a meeting of a high level council met last night for three hours. They came out, came on the camera and basically pledged themselves to work together for unity, avoiding violence.

And I think that the opportunity this presents is for the Iraqi communities, all three of them, to come together, to develop a unity government and say to Iraqis and to the world that they are not going to go down the route of civil war. And that’s certainly what we hope will happen.

BLITZER: A lot of the minority Sunni Iraqis say they’re right now terrified by the majority Shia. The Department of Defense issued a report the other day in which it said — it concluded — among other things, it concluded this: “Insurgent infiltration and militia influence remain a concern for the Ministry of the Interior” — referring to the Iraqi Ministry of the Interior. “Many serving police officers, particularly in the south, have ties to Shia militias.”

And the — an Iraqi Islamic Party official, a Sunni leader, is quoted as saying, “Forces of the Ministry of the Interior are making attacks in many districts of Baghdad and arrest people without any accusations, simply because they are Sunni people.”

It looks like this situation, this divide between Shia and Sunni, is getting worse.

HADLEY: There’s been concerns about the Iraqi police. As you know, we, through the military, have been training the Iraqi national army. That is going very well. The military has also taken responsibility for training police. That is clearly about a year or so below — behind where we are in training the Iraqi army.

And there have been concerns about infiltration of militia into the police. And one of the major priorities for 2006 is to concentrate on — on the police, work through and make sure that the people in the police do not have ties to militia groups, are going to be loyal to the central authority, and have the necessary training to do their jobs.

Again, there’s work to do. That’s why General Casey has made 2006 a real priority to focus on — on the Iraqi police. It’s also why, as Ambassador Khalilzad said, it is very important in the new government that the heads of the ministry in defense, ministry in the interior, be professionals, competent, without ties to militia, who will run these organizations in a non-sectarian way. That’s very important, and that’s why Ambassador Khalilzad made those statements earlier this week.

BLITZER: You want — the United States government — you want the Iraqis to disband the militias, whether the Mehdi militia ruled by the Shiites or the Peshmerga militia ruled by the Kurds. Is that the position of the Bush administration, that all of these independent militias who are operating, they must be disbanded?

HADLEY: Certainly, that is our position. We want to build a national Iraqi army, a national Iraqi police force that will be free of ties to the militia and — and loyal to the central government. That’s our objective. That’s what the training program is all about.

But as we’ve seen in Afghanistan, disarming militias takes some time.
There’s a point in the political process where that can be done. It is difficult now, because the communities do not feel comfortable. They do not feel secure. We saw this in Afghanistan. There were militias there. It took some time. But one of the good news about Afghanistan is that there has been largely dismantling those militias.

That’s our view, is that needs to happen in Iraq. Obviously, the timing of that is going to be something that the new Iraqi government will have to take responsibility for.

BLITZER: A few months back, the Defense Department, the Pentagon, issued a report saying that there were three Iraqi brigades that were now at what they call Level One, capable of operating on their own without any U.S. assistance. Then more recently, it went down from three to one Iraqi brigade. And only the other day in this latest Pentagon report, they now say there are zero Iraqi brigades that are at Level One, capable of operating without U.S. assistance. Those trend lines don’t seem to be going in the right direction.

HADLEY: But those aren’t the trend lines that matter. There’s been a lot of discussion about this. What matters is Iraqi units that are able to work side by side with coalition forces and Iraqi units that are able to take the lead with support by coalition forces and finally, those Iraqi units that are able to take responsibility for territory with minimal coalition support.

Those numbers are all going up in a sensible and a measured way. That’s an evidence of the success of this program.

Look, with — the number of U.S. or NATO units that can operate wholly independently are very small. To say that a unit operates wholly independently means its got its own logistics, own air support and all the rest.

That is an area where we have more work to do, to build logistics, transport and other things that will allow the Iraqi army to — to operate, really, autonomously. That’s going to take time. The — the DOD forces over there have a program to do that, but it’s going to take months and years.

What really matters, though, is the ability of these forces to take responsibility, in conjunction with the coalition forces, and then take the lead. They are increasingly able to do so. That’s the good news about the training program.

The logistics of the things will take some months to do. We’re on that. But the main thing is that Iraqis want to be and are getting into the fight against the terrorists to win their own freedom from the terror that is really the scourge of Iraq at this point.

BLITZER: Let’s make the turn to port security in the United States.
Dubai Ports World purchasing the right to operate six major U.S. ports: New York, Newark, Baltimore, Philadelphia, New Orleans and Miami. Is the Bush administration now ready to give this deal another 45 days to have a full-scale national security investigation to determine whether this is the right thing for the United States to do or the wrong thing for the United States to do?

HADLEY: As you know, Wolf, the president supports the decision — decision that was made. He believes that the process that was run was a good one and it came to the right result. It’s obvious that we need to make — have some opportunities and some time to get a better understanding on the part of the Congress as to what is entailed in this transaction. We’re confident — the president is confident that when Congress really understands the transaction, they will conclude, as he did, that it’s the right thing to do.

We understand that the companies involved in the transaction are talking to the Congress about ways to get a time and a mechanism for allowing this to go forward. We are aware of those efforts. We support those efforts.

And what the Congress and the companies are able to work out, we will obviously support and cooperate with, so long as it does not involve a summary decision by the Congress that blocks this transaction.

We’re confident by this process Congress will come to the same conclusion the president did.

BLITZER: The law — the CFIUS law, the Committee on Foreign Investment in the United States, stipulates that if national security considerations are at stake, there must be this 45-day investigation. Bob Kimmitt, the deputy treasury secretary, this week said the national security considerations are not at stake involving this Dubai-owned company. Listen to what he said.

(BEGIN VIDEO CLIP)

BOB KIMMITT, DEPUTY TREASURY SECRETARY: On January 17, the committee was asked to make its judgment on this proposed acquisition. By consensus they said that there was not a national security concern in their mind that would require either blocking the deal or sending it to investigation.

(END VIDEO CLIP)

BLITZER: Among the many critics of this deal, Democrats and Republicans, including Rick Santorum, the Republican senator from Pennsylvania. He said “while the United Arab Emirates has been an ally over the last few years, it certainly has ties to Islamic fascism, and trusting that it will remain on our said in the war on terror is not a risk that I am willing to take.”

How is it possible that this committee, interagency committee, determined there was no national security interest at stake worthy of justifying a 45-day investigation?

HADLEY: Because that was the determination they made. They’d made it based on available intelligence, which did not suggest any national security concerns. All the 12 or so agencies involved looked at it. None of them requested an investigation, because there were — there were unresolved concerns.

The Department of Homeland Security, which is the agency most directly involved with those security aspects, negotiated with the company some additional assurances of which you are aware that removed any residual concerns they had.

And part of it is also this is a company that is known to U.S. authorities, that operates terminal operations in a number of ports overseas, where we are engaged personally with them.

Remember, port security doesn’t start at our ports. It starts overseas with the cooperation of countries and companies operating ports overseas to make sure that cargo containers and other things heading our way are safe. The first line of defense is overseas, and this company and this country have been very good allies in that process.

BLITZER: I was going to say, as the national security adviser to the president, when were you informed? When did you first learn about this deal?

HADLEY: I learned about it roughly at the same time that the president did. Within two or three days thereafter, I brought in all those people within the National Security Council who — staff who had been involved. I did a review of what was done, and I came to the same conclusions the president had done, that this was a good process, that there were not unresolved national security concerns.

And I was buoyed by the kinds of statements you’ve seen from General Tommy Franks, General Pete Pace, who have talked about what a good ally the UAE has been to the United States. And they have been an ally in the war on terror. They have supported our operations and activities in terms of both Iraq and Afghanistan.

And it’s very important, Wolf, that countries that side with us and are cooperating with us are treated like the allies that they are. We need a lot of support from Arab countries if we are going to prevail in this war on terror. And you don’t get those — those — that kind of support if you don’t treat your allies as the kinds of good stalwart allies and friends that they are trying to be.

BLITZER: A lot of people are probably scratching their heads right now, listening to you, Mr. Hadley. Because, while the UAE may be a good ally right now, it hasn’t always been the case.

The 9/11 Commission concluded this: The United Arab Emirates, the financial center for the gulf area, also had a reputation for being wide open with few regulations on the control of money and a woefully inadequate anti- money laundering program. The vast majority of the money funding the September11 attacks flowed through the UAE. And the UAE was one of only three countries that had relations with the Taliban regime in Afghanistan before 9/11.

So they’re asking how is it possible that you could conclude there were no national security considerations at stake that would have justified a more thorough investigation?

HADLEY: Because a lot of things changed after 9/11. A lot of things changed in how we do business. A lot of things changed on how other countries conducted themselves.

Wolf, all the things you said could have been applied to Pakistan. And as you know, the United States at this point has a very loyal ally in the war on terror against — war against terror in Pakistan. Pakistan is involved in activities and operations against al Qaeda. There have been several hundred al Qaeda operatives that have been either killed or captured by Pakistani authorities. Pakistanis, large numbers of their security forces have lost their lives.

The point is what — I think, not withstanding what was done before 9/11, the kinds of things you could say with respecting UAE or Pakistan, these are two countries who have been good allies in the war on terror and whose support we’re going to need if we’re going to prevail in this conflict.

BLITZER: The leadership of Pakistan, President Musharraf, is a strong ally. But as you know, there are elements in the military, in the intelligence community who may not necessarily be all that supportive. Are you saying that if Pakistan wanted to operate ports in the United States that it wouldn’t justify a national security investigation?

HADLEY: I’m saying if Pakistan wanted to operate ports in the United States, we would do exactly what was done in this case. We would get the agencies together. We would look at the applicable intelligence. We would have each of the agencies take a look. If there were national security concerns that were raised, we would deal with them. That’s the process that we need to do.

But the point is, Wolf, the test is not whether the acquiring country is an Arab country or not. The test is whether the acquiring country — company and the company through which they would exercise control raises national security concerns. That’s the test. That was the test that was applied in this case, and that would be the test that should be applied in every other case. It’s the test that this Congress specified in the statute.

And that’s what we’ve been trying to apply.

BLITZER: We’re all out of time, but a quick question on Iran and its nuclear enrichment program. Reports today it’s worked out some sort of tentative deal with Russia that would enable Russia to enrich uranium from Iran. You’ve seen those reports. What do you make of them?

HADLEY: It’s too soon to say. We’ll have to see. The Russian energy minister, announcing an agreement in principle, but said that negotiations would continue in Moscow. In any of these arrangements, the devil is in the details. We’ll just have to see what emerges.

BLITZER: Stephen Hadley, thanks for joining us on LATE EDITION.

HADLEY: Thanks very much.